The more we get to see & understand America during our business trips, the more we realise that America and India are two democracies which were separated at birth. To that end, people in India who rail & the rant at the Indian state would do well to understand the imperfect rise of America on several fronts not least with regards to how America treats its poor. This interview in The Atlantic with Princeton professor and Pulitzer Prize winning author, Matthew Desmond, is an indictment of how the American elite treats its poor. The read-across for the Indian elite is painfully obvious.
The interviewer, Annie Lowery, prefaces the interview with an introduction to Mr Desmond: “Why do so many Americans live in poverty? Because so many rich people benefit from it.
This is the thesis of the lauded sociologist Matthew Desmond’s new book, Poverty, by America. The best seller is at once a careful exploration of poverty statistics; a deeply reported depiction of the lived experiences of the poor; an examination of the ways America’s wealthy exploit the masses; and a case for ending poverty. Desmond shows how the country’s employers, financial institutions, and landlords extract money from low-income families while rich families hoard opportunity for themselves. He also demonstrates how America’s safety-net programs are not just too stingy but poorly designed.
Desmond is a professor at Princeton. His previous book—Evicted, about the low-income rental market in Milwaukee—won a Pulitzer Prize. We discussed how the rich came to win the War on Poverty and what’s necessary to end poverty.”
Amongst the points Mr Desmond makes in his interview, three of them standout for the relevance for those of us who live in India. The first is how different America is from both Europe and from the East Asian nations:
“We have double the child poverty rate of Germany and South Korea….We collect a much smaller share of our GDP in taxes every year…We have so many resources. Our tolerance for poverty is very high, much higher than it is in other parts of the developed world.”
Secondly, Desmond says that it is important to understand and identify exactly who benefits from poverty (otherwise you might end up believing the nonsense peddled on trickle down economics): “We have massive amounts of evidence about the benefits of government spending on anti-poverty programs….A lot of us benefit from it [poverty]….I mean a lot of us, those who have found security and comfort in America consuming cheap goods and services that the working class produces for us.
Half of us are invested in the stockmarket….we see our savings going up and up when someone’s pay is going down and down….Those two things are related.”
Thirdly, Desmond says that people’s attitudes to poverty in America are underpinned by the attitude (i.e. implicit acceptance) of racism: “It is impossible to write a book called ‘Poverty, by America’ without writing a book about racism. One of the big things that makes Black poverty and white poverty different is segregation. In white America there’s no equivalent of the incredibly segregated and poor neighbourhoods so many Black families find themselves in.
It’s interesting to read the histories of segregation in the 1950s or 1930s. The segregationists used the same exact arguments that we do today. They talk about property values, schools and crime.”
In case you would like to understand segregation in India, we would recommend that you read New York subway train driver Sujatha Gidla’s hardhitting book on caste oppression in modern day Telengana, ‘Ants Amongs Elephants’ (https://www.theguardian.com/
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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.
